Judge Finds Gmail Privacy Settlement Inadequate

SAN JOSE, Calif. (CN) – A federal judge refused to sign off on a settlement between a class of email users and Google, sending the parties back to the drawing board to come up with a more detailed disclosure of how Google intercepts and uses emails for targeted advertising.

U.S. District Judge Lucy Koh issued the order Thursday, saying the class did not demand enough concessions from the tech giant its practice of scanning incoming and outgoing emails for information that it uses for targeted advertising.

Specifically, Koh wanted to see disclosures hosted on a website or somehow publicly disseminated that clearly spell out how Google intercepts, scans and uses the information from non-Gmail users.

“The notice does not clearly disclose that Google intercepts, scans, and analyzes the content of emails sent by non-Gmail users to Gmail users for the purpose of creating user profiles of the Gmail users to create targeted advertising for the Gmail user,” Koh wrote in the six-page order. “It does not disclose that Google will scan the email of non-Gmail users while the emails are in transit for the ‘dual purpose’ of creating user profiles and targeted advertising and for detecting spam and malware.”

Koh made her displeasure over the settlement clear to both parties during a hearing last week, with class attorney Michael Sobol particularly singled out as the target of her discontent.

“It’s very vague and at best it is unclear what you are doing,” Koh told Sobol at a March 10 hearing.

At one point in the hearing, a clearly frustrated Koh asked Sobol if he thought he was worth the $2.2 million in attorney’s fees he was requesting given that he did not conduct any depositions and instead relied on discovery from previous cases.

In her ruling, Koh further expressed concern the settlement as currently construed doesn’t even bring Google into compliance with the Wiretap Act or “that the technical changes that the settlement provides brings Google into compliance with the Wiretap Act and CIPA, as plaintiffs assert.”

The dispute at the heart of the case involves Google’s practice of intercepting non-Gmail users’ emails as they are being transmitted. The company then scans the emails for keywords and uses those to create a user profile, which allows them to engage in targeted advertising for their clients.

The Wiretap Act and Children’s Internet Protection Act forbid the interception of emails, so plaintiffs have sued both Google and Yahoo over violations of the provisions of those two acts. In previous settlements, with Yahoo in particular, the remedy was for the company to scan the emails once they were stored in users’ inboxes.

This means the companies don’t technically intercept the message, bringing them into compliance with telecommunications laws. Past settlements have also mandated disclosures that clearly spell out how email providers scan and use their email content, including the high profile In Re Yahoo Mail Litigation.

Plaintiffs argued that the Google case before Koh now is similar to Yahoo and their proposed settlement is roughly parallel. Koh disagreed.

“The settlement in Yahoo included additional important disclosures regarding scanning of incoming and outgoing emails and the sharing of information with third parties,” she wrote.

In contrast, the proposed settlement with Google fails to ensure compliance with the law, earns no disclosures for consumers and relies on old information in the form of discovery produced up to six years ago, Koh said.

“Plaintiffs’ use of discovery produced between three to six years ago is particularly questionable in this case given that the instant settlement requires Google to maintain the injunction’s technical changes for only three years because the architecture and technical requirements for providing email services on a large scale evolve and change dynamically,” she wrote.

She added, “In sum, based on the parties’ current filings, the court cannot conclude that the settlement is ‘fundamentally fair, adequate and reasonable.’”